Under New Institutional Theory, Institutions Can Be Categorized as Formal

question 14

Multiple Choice

Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:

• A) normative and cognitive.
• B) normal and abnormal.
• C) informally cognitive and formally cognitive.
• D) effective and ineffective.

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Definitions:

Compound Interest

A way of calculating interest whereby the charge is based on the initial principal amount as well as on the interest that has accumulated in prior periods of a loan or deposit.

Cash Inflow

Money received by a business, typically from operational, investing, and financing activities.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Compound Interest

This refers to the calculation of interest on both the initial amount deposited or borrowed as well as on the interest that has already been accumulated over previous periods.